[1] Portnet,
a division of Transnet Limited, has applied to review an award handed
down by Commissioner Finnemore in connection with
an arbitration
concerning Mr Hattingh, an employee of Portnet. The third respondent
is Mr Hattingh's union, the Employees Union
of South Africa.

[2] Portnet and its employees,
including Mr Hattingh, are subject to the Transnet Bargaining
Council, established and deemed to
be registered in terms of the
Labour Relations Act 66 of 1995 (“the Act”). Section
28(c) of that Act empowers the Bargaining
Council to resolve
disputes. This power is defined and regulated in clause 13 of the
constitution of the Bargaining Council. That
clause provides, inter
alia, that parties who are in dispute about alleged misconduct of
an employee are referred to arbitration. This arbitration, in essence
therefore, amounts to compulsory arbitration. The Council does not
itself arbitrate the matter. The arbitrator is an independent
person
who is appointed to arbitrate the matter. The arbitrator does not act
on behalf of the Council but arbitrates by virtue
of the submission
to arbitration, and in terms of the Arbitration Act No. 45 of 1965.
It follows that the review powers of this
Court under s158(1)(g) of
the Act, which provide for the review of the performance or purported
performance of any function provided
for in this Act or any act or
omission of any person or body in terms of this Act on any grounds
that are permissible in law, are
not applicable. The review of the
arbitrator's award must therefore be determined in terms of s157(3)
of the Act which provides
that any reference to the Court in the
Arbitration Act of 1965 must be interpreted as referring to the
Labour Court when an arbitration
is conducted under that Act in
respect of any dispute that may be referred to arbitration in terms
of this Act.

[3] Quite clearly the matter in
issue is a dispute which could be referred to arbitration in terms of
the Labour Relations Act 66 of 1995. Section 33 of the Arbitration
Act of 1965 provides:

(1) Where -

(a) any member of an arbitration
tribunal has misconducted himself in relation to his duties as
arbitrator or umpire; or

(b) an arbitration tribunal has
committed any gross irregularity in the conduct of the arbitration
proceedings or has exceeded its
powers; or

(c) an award has been improperly
obtained,

the Court may, on the
application of any party to the reference after due notice to the
other party or parties, make an order setting
the award aside.

[4] Of course the Arbitration Act
of 1965, like any other Act and indeed the common law, must be read
subject to the Constitution
of the Republic of South Africa of 1996.
The Labour Appeal Court in dealing with s145 of the Labour Relations
Act of 1995 had occasion to consider the relationship between that
section and the Constitution in Carephone (Pty) Ltd v Marcus NO &
Others1998 (10) BCLR 1326 (LAC). The conclusion which was
reached in that case is that the CCMA was an administrative body and
thus that the decisions of
the CCMA, when it arbitrates, were
required to be justifiable, and if they were not justifiable that
would enable the Court to
intervene on the grounds set out in s45 of
the Act. However, as I have indicated, in this case we are dealing
with a private arbitration
conducted in terms of the Arbitration Act
of 1965. The High Court in Patcor Quarries CC v Issroff and Others1998 (4) BCLR 467 (SE) had occasion to consider certain
constitutional points raised in regard to the ambit of arbitration in
terms of the Arbitration
Act of 1995. The Constitution at that
particular stage was the Constitution of the Republic of South Africa
of 1993, i.e. the interim
Constitution. In that case Mpati J said, at
479, of s24(d) of the interim Constitution, that:

It is quite clear that the
section provides protection against the violation of a person's
rights, which may be affected or threatened
by administrative action.
The question is whether an arbitrator, in the performance of his
duties as such, performs an administrative
act when he adjudicates in
arbitration proceedings and whether his decision (award) can be said
to be an administrative decision.
I think not. An arbitration is in
the nature of litigation. There is a dispute between two or more
parties, which, more often than
not, may be adjudicated upon by the
Courts, but in a quest for speedy and less costly resolution, the
parties agree to submit such
dispute to arbitration. One of the
characteristics thereof “is the finality of the arbitrator's
award” (Kollberg
v Cape Town Municipality1967 (3) SA 472 (A) at 481F), hence the provisions of section 28 of
the Arbitration Act (see also the definition of the word
“arbitration”
in Butler and Finsen Arbitration
in South Africa, Law and Practice,
and in Jacobs The Law
of Arbitration in South Africa).
I am accordingly of the view that an arbitrator does not perform an
administrative function when adjudicating over a dispute
in
arbitration proceedings but rather a judicial function. It follows
that section 24 of the interim Constitution cannot be invoked
to
challenge his award. The first constitutional point must fail.

[5] For
present purposes it is unnecessary for me to deal with the extent to
which the Arbitration Act of 1965 must be dealt with in
terms of the
Constitution. On the facts of this case I am able to apply s33 as it
reads, without requiring a liberal or restrictive
interpretation.

[1]

[6] Portnet alleges that the
dispute between itself and Mr Hattingh was referred to arbitration by
the Transnet Bargaining Council
where it was arbitrated by the first
respondent, Commissioner Finnemore. She rendered an award and
concluded as follows:

The arbitrator finds the
dismissal substantively and procedurally unfair. However, in making
the award it is noted by the arbitrator
that Mr. Hattingh, although
authorised to collect the sheets in the manner he did, should also
have been aware of the rule about
collection, as everyone else knew
about it. Although Mr. Hattingh said he did not know about the rule,
Mr. Nel said it appeared
on the board in the elevator. Furthermore,
Mr. Hattingh, (sic) himself admitted that he was aware that there
might be a problem
as the workers were watching intently what he was
doing. It also appears that he pressurised Promat management to make
the alternative
arrangements. Mr. Hattingh thus acted irresponsibly
for such a senior manager by conducting the removal of the sheets
from the
elevator area in the manner he did, especially without Mr.
Bauer being the witness. Rules should be adhered to especially by
senior
managers. There was no urgency for the removal of the sheets.
Mr. Hattingh's behaviour is thus partly responsible for the debacle.
Mr. Hattingh is thus only reinstated from the 1st January 1998.

[7] Dr
Grogan, who appeared on behalf of Portnet, submitted that the
arbitrator's award contained patent and latent irregularities of
such
a nature that it would enable this Court to intervene and set aside
the award. For reasons which will become apparent it is
only
necessary for me to deal with some of the patent irregularities.

[8] The first relates to the
failure to administer the oath. It was submitted, and it is common
cause, that the oath was not administered
by the arbitrator. It was
further submitted that although arbitrators are entitled to conduct
proceedings relatively informally,
neither the Transnet Bargaining
Council Agreement nor its
constitution impose an obligation to conduct proceedings "with a
minimum of legal formalities". In any event, a minimum
of legal
formalities does not mean that even the most fundamental of
formalities can be disregarded. Dr Grogan went on to submit
that the
matter to which an arbitrator must have regard must, in the absence
of agreement to the contrary, be evidence as contemplated
in law. In
the case of viva voce
testimony this can only be given under oath or on affirmation. See
Hoffmann and Zeffert The
South African Law of Evidence
4th ed at p.440. Dr Grogan pointed out that s14(1) of the Arbitration
Act of 1965 provides that an arbitration tribunal may, unless
the
arbitration agreement provides otherwise, administer oaths or take
the affirmations of the parties and witnesses appearing
to give
evidence. It is the submission of Portnet that this section is
mandatory and not permissive. Reference is made to Butler
and Finsen
Arbitration in South
Africa, Law and Practice
1993 at pp.183-4. I have read that passage carefully and the furthest
that it takes this is the following where it is said:

Oral evidence, particularly in
more formal arbitration proceedings, is almost invariably given under
oath.

[9] It is true that it has been
held by the Labour Court in regard to s145 of the Labour Relations
Act 66 of 1995 that the failure to administer an oath in itself
amounts to an irregularity which entitles the Court to intervene. See
Morningside Farm v van Staden and Others1998 (5) BLLR 488 (LC)
at 491B-E. The submission was made that the principle laid down in
that case must apply to arbitrations conducted in terms
of the
Arbitration Act of 1965. However, it does not necessarily follow that
the principle that evidence must be given under oath
also applies to
the Arbitration Act. Jacobs The Law of Arbitration in South Africa
1997, states at p.80:

In an application to make an
award an order of court, the respondent opposed this on the grounds
that, inter alia,
the evidence, if any, was not given on oath and that the arbitrator
had gone beyond the scope of the deed by having taken into
account
certain items. It was held that the parties when before the
arbitrator had agreed to waive the necessity for taking evidence
on
oath or for recording the evidence and the award was confirmed.

[10] I
am not convinced that, where the parties are in agreement that in
private arbitration proceedings evidence need not be led under
oath
or where no objection is taken at any stage, a party can subsequently
approach this court and cry foul. Accordingly, I do
not think that
the arbitration award is reviewable because of the failure to
administer the oath. This of course does not imply
that such action
should be taken lightly.
An arbitrator should bear in mind that an arbitration is a formal
proceeding and that it is most desirable that evidence be given
under
oath or that an affirmation be made before the evidence is given.

[11] The
next ground on which Portnet relies is that there was undue
interference with the applicant's representative. It was submitted
that the arbitrator did not deny Mr Moeti's allegation that he
himself, in his capacity as the representative, was subject to
lengthy "cross-examination" by the arbitrator regarding an
incidental matter when he was attempting to cross-examine Mr
Hattingh. It has been said that this must have distracted his
attention and this must be self-evident. Quite clearly it is not
desirable to interfere with the way in which a representative
conducts cross-examination, particularly when it may lead him to
be
distracted. However, in this case, there does not seem to have been
any prejudice and certainly not sufficient prejudice, nor
was it an
irregularity of such a nature, as to warrant the review of the
arbitration award.

[12] Next, reliance was placed
on the fact that the arbitrator relied on the notes of the presiding
officer of the disciplinary
inquiry. It was submitted that Mr Moeti
gave the notes to the arbitrator who accepted them, stating that she
would read them overnight.
There was no agreement or even discussion
about their status. In fact no reason has been offered as to why the
notes were tendered
in the first place. The arbitrator has stated
that Mr Moeti did not object to her considering them in coming to any
decision concerning
the arbitration. The submission was made that
whether or not Mr Moeti objected to her considering the notes is
beside the point.
The fact is that by considering them she had regard
to evidence that was not properly before her. The arbitrator confirms
that
she did have resort to them in this manner. She says in a
document titled “Further Reasons and Clarification of Award”
that:

It would have been impossible
not to refer to them and do justice to the case for the following
reasons. Mr. van Vuuren, the union
representative, referred to a
witness that only presented evidence in the disciplinary enquiry,
namely Mr. Lindane, and therefore
the arbitrator had to use these
documents to assess whether Mr. van Vuuren's statements were correct
or not.

[13] She
also says:

It was in perusing the
disciplinary enquiry document that the arbitrator became aware of
inconsistencies in Mr. Faleni's statements
between the arbitration
hearing and the disciplinary enquiry relating to his whereabouts that
day and his description of the car.

[14] The
submission was made that these inconsistencies were not put to Mr
Faleni by the arbitrator, or to Mr Hattingh's representative,
yet
they were relied on by the arbitrator to discredit Mr Faleni's
evidence. This, it is contended, amounts to a patent irregularity
which in itself vitiates the proceedings and the award.

[15] This particular case turns
very much on the evidence of Mr Faleni and what he saw on the day in
question. Mr Faleni was not
given an opportunity to deal with the
inconsistencies relied on by the arbitrator; neither were any of the
parties.

[16] The evidence of Mr Lindane
was not before the arbitrator and none of the parties were afforded
an opportunity to deal with
it. No-one knew that the arbitrator was
going to rely upon the disciplinary record in this way in coming to
her conclusion. In
my opinion this is a grave irregularity which goes
to the root of the matter. The audi alteram partem rule
requires that the parties and their representatives be given an
opportunity to be heard in regard to every matter and every
piece of
evidence which an arbitrator may take into account. They were denied
this opportunity. The evidence, in my opinion, was
improperly
admitted and the audi alteram partem rule was not complied
with. On this basis alone it is appropriate to set aside the award.
As such, it is not necessary for me to
consider what was done with
the material before the arbitrator or to consider whether latent
irregularities also took place.

[17] In consequence

The arbitration award made by
the first respondent on 23 March 1998 in the arbitration between the
Employees Union of South Africa
on behalf of Mr W Hattingh and
Portnet, a division of Transnet, is hereby reviewed and set aside.

The matter is remitted to the
Transnet Bargaining Council for the resolution of the dispute
between Portnet and Mr Hattingh by
the referral of the dispute to an
arbitrator other than the first respondent to re-hear the matter.

[18] There was an agreement that
no costs would be sought by Portnet against Mr Hattingh and in my
opinion no costs should be awarded
against the union either. In the
circumstances there will be no order for costs.